Henson and Kendall and Anor

FAMILY COURT OF AUSTRALIA

HENSON & KENDALL AND ANOR

[2009] FamCA 1254

FAMILY LAW - PROPERTY - alteration of property interests – whether a disposition should be set aside – consideration of debt owing to the husband’s father

Family Law Act 1975 (Cth) ss 75(2), 79, 79(4)(d)-(g), 106B

Biltoff & Biltoff (1995) FLC 92-614

APPLICANT:

Ms Henson

RESPONDENT:

Mr Kendall

2^nd RESPONDENT:

Mr Kendall (Snr)

FILE NUMBER:

SYF

3520

2006

DATE DELIVERED:

21 December 2009

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

24 - 26 November 2008; 17 December 2008; 27 April 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Wetmore

SOLICITOR FOR THE APPLICANT:

Litigant in person

SOLICITOR FOR THE RESPONDENT:

Litigant in person

SOLICITOR FOR THE 2^ND RESPONDENT:

Litigant in person

Orders

Pursuant to s 79 Family Law Act, an order be made in accordance with paragraphs 2 to 8 below.
The husband and wife do all things and sign all necessary documents to cause the monies (including accumulated interest) in the controlled monies account with Newnhams to be divided in the following manner:
2.1.$50,000.00 to the husband;
2.2.The balance to the wife.
Subject to these orders, the wife retain as against the husband, all assets, real or personal, resources and superannuation entitlements in her possession, custody and control or to which she becomes entitled.
Subject to these orders, the husband retain as against the wife, all assets, real or personal, resources and superannuation entitlements in his possession, custody and control or to which he becomes entitled.
The parties do all acts and things necessary to forthwith cause the Kendall and Henson partnership to be dissolved and that it be declared that no sum is due on that partnership to the husband or to D Pty Limited or to Mr Kendall (Snr).
The husband make no claim for any funds owed to him by the wife and/or her professional practice for services rendered by him in his personal capacity or in any other capacity and do all things to cause D Pty Limited to likewise quit any claim against the wife.
Subject to these orders, the wife be responsible for and indemnify the husband in relation to any suit, action, demand or claim arising from any debt or contingent debt in the wife’s name.
Subject to these orders, the husband be responsible for and indemnify the wife in relation to any suit, action, demand or claim arising from any debt or contingent debt in the husband’s name.
As between the wife, husband and the 2^nd respondent, pursuant to s 78 Family Law Act it is declared that the property known as R property, being folio identifier … is the property of the 2^nd respondent, Mr Kendall (Snr).
It is declared that the wife is not indebted to the 2^nd respondent and in the event that the 2^nd respondent makes any claim in the future against the wife based on the debt alleged to be in existence as at the date of these orders, then the husband will indemnify the wife in relation to any claim and indemnify the wife in relation to any expenses associated with any such claim.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so) any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act to execute such documents on behalf of such party.

IT IS NOTED that publication of this judgment under the pseudonym Henson & Kendall and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3520 of 2006

MS HENSON

Applicant

And

MR KENDALL

Respondent

And

MR KENDALL (SNR)

2^nd Respondent

REASONS FOR JUDGMENT

INTRODUCTION

This is an application about what alteration of property should be made between the husband and wife.
One central contentious issue in this case is whether or not an order should be made pursuant to s 106B of the Family Law Act 1975 (Cth) (“FLA”) setting aside a transfer by the husband to his father (“Mr Kendall Snr”) who is the second respondent, of a property at R (“the R property”).
The R property was transferred via a transfer document (Annexure “Q” to the wife’s affidavit sworn 29 October 2007). That transfer was dated 17 May 1996 but was prepared and registered on the title in about August 2006 (a date after the parties separated).
Final orders have been made in relation to the three children of the marriage (although the husband at the current time has taken the position that he is not currently making himself available for the children to spend time with him).

APPLICATIONS

Wife

The wife filed a further Amended Application for Final Orders on 11 April 2007. The orders she sought in that application in respect of property settlement are as follows:
1.That the husband pay to the wife within 56 days of the date of these orders an amount of $100,650.00.
2.That the parties forthwith do all acts and things necessary to cause the net proceeds of sale of the property located at [T] registered number […] to be paid to the wife.
3.Each party shall forthwith do all such acts and things as may be necessary to procure the sale of the property located and known as [M] (“the [M] property”) at the best price reasonably obtainable and apply the proceeds of any sale of the property in the manner following that is to say:
a.     In payment of the agents selling commission and selling costs;
b.     In payment of the legal costs and disbursements of and incidental to the sale of the property;
c.     In payment of rates and outgoing adjustments (if any);
d.     In payment of the amount necessary to discharge the debt secured upon the [M] property to the Westpac Banking Corporation which as at 14 September 2006 are estimated to be $588,648;
i.$455,303.78 in respect of the advance procured under the original mortgage charged thereon Registered Number […];
ii.$38,344.48 (approximately) in respect to the Hire Purchase Agreement in respect of the [Business] Fit-out, Loan Account No. […];
iii.About $45,300.00 in respect of the Overdraft facility in the name of [the wife];
iv.In repayment to the wife of the amount paid by the wife to discharge the overdraft facility with Westpac in the name of [D] Pty Ltd (approximately $95,000.00); and
v.In payment to the purchaser of the amount of the deposit bond misappropriated by the husband and which he has been ordered to repay $13,650.00.
e.     In payment of the balance of the proceeds to the wife.
4.For the purpose of Order 3:
a.     the sale of the [M] property shall be by private treaty and the property shall be listed with [the agent] for a sale price of $1,395,000;
b.     the parties shall accept any offer of an amount of $1,200,000 or more and do all acts and things necessary to cause the exchange of the contracts of sale as soon as practicable; and
c.     in the event that the [M] property does not sell within six months of the date of these orders then the parties accept [the agent’s] recommendations, or the recommendations of any other real estate agent appointed in his place, regarding the sale price being reduced and/or the property being sold by auction and the reserve price for the auction.
5.That under section 106B of the Family Law Act 1975, that the transfer of the property located at and known as [R] (“the [R] property”) from the husband to [the husband’s father] be set aside.
6.In the event that the husband does not comply with Order 1 hereof, then the husband do all acts and things necessary to cause the sale of the [R] property for the highest price reasonably obtainable and to cause the proceeds of sale to be distributed as follows:
a.     To pay legal fees and real estate agents fees associated with the sale;
b.     To pay to the wife $100,650 and any accrued interest;
c.     To pay the balance if any to the husband.
7.Subject to these orders, that the wife retain as against the husband:
a.     The property located at [P] (“the [P] property”) or any proceeds of sale from the said property;
b.     Funds in her bank accounts;
c.     Interest in the Great Southern Plantation investment;
d.     Odyssey Honda motor vehicle;
e.     Her [professional] practice;
f.     Household contents in her possession; and
all other asset, real or person [sic], resource and superannuation entitlement in her possession, custody or control or to which she becomes entitled.
8.Subject to these orders, that the husband retain as against the wife:
a.     His interest in the [R] property;
b.     Funds in his account
c.     Hilux Ute Toyota
d.     VW motor vehicle
e.     Shares/Futures contracts
f.     Shares in [D] Pty Ltd
g.     [Husband’s professional practice];
h.     Household contents in his possession; and
all other assets, personal or real, superannuation entitlements and resources in his possession, custody or control and to which he becomes entitled.
9.That the parties do all acts and things necessary to forthwith cause the [Kendall & Henson] Partnership to be dissolved, and that it be declared that no sum is due on that partnership to the husband or [D] Pty Ltd, or [the husband’s father].
10.That the husband quit claim to any funds, if any, owed to him by the wife and/or her [professional] practice for services rendered by him in his personal capacity or in any other capacity and do all things to cause [D] Pty Ltd to likewise quit claim.
11.Subject to these orders, that the wife be responsible for and indemnify the husband in relation to any suit, action, demand or claim arising from following debts and contingent liabilities:
a.     Her income tax liability;
b.     Any capital gains tax liability she incurs from the sale of the [M] property and the [P] property;
c.     Her credit card debts;
d.     The Hire purchase loan with St George; and
e.     Any other debt or liability in her name.
12.Subject to these orders, the husband be responsible for and keep the wife and the partnership of the husband and the wife indemnified in relation to any suit, action, demand or claim arising from the following debts and liability:
a.     His income tax liability;
b.     Any capital gains tax liability he incurs from the sale of the [M] property;
c.     His credit card debts;
d.     Any moneys owing to:
i.[N] Pty Ltd;
ii.[S] Pty Ltd;
iii.[the husband’s father]; and
e.     Any other debt or liability in his name.
In final submissions, the wife sought an 80/20 division of assets with the R unit being one of those assets.

Mr Kendall Snr

Mr Kendall Snr filed a Response to a Further Amended Application for Final Orders on 30 August 2007. In that document he states the final orders that he is seeking, which are in the following terms:
1.Declaration that the property known as [R property] is the property of the Second Respondent [Mr Kendall Snr].
2.Declaration that the Applicant and the First Respondent are indebted to the Second Respondent in an amount of $215,792.20 together with interest as accruing pursuant to the appropriate legislation and that such payment is to be made to the Second Respondent from the proceeds of the sale of the Applicant’s and First Respondent’s assets prior to any distribution between the parties.
3.Costs.

The husband

It is the husband’s position in final submissions that if his father gets the R unit, he should take over responsibility of the judgment debt his father has against him and the wife should otherwise be given the balance of the assets. The only rider on that was there is an outstanding tax debt arising from the disposal of the M property that the husband needs to attend to.

SHORT HISTORY

The wife was born in 1964 and is 45 years of age.
The husband was born in 1968 and is 41 years of age.
There are three children of the marriage, C born in September 1995 (14 years of age), O born in January 1997 (12 years of age) and W born in August 2000 (9 years of age).
The husband and wife commenced a relationship in about December 1989.
The husband and wife married and commenced to live together in 1992.
The husband and wife separated in September 2005.

DOCUMENTS READ

Wife

Financial Statement sworn and filed 29 October 2007;
Affidavit sworn and filed 29 October 2007;
Further updating affidavit sworn and filed 3 October 2008;
Affidavit sworn and filed in Court on 24 November 2008;
Further Financial Statement sworn and filed 19 November 2008.

Husband

Affidavit sworn and filed 11 May 2007;
Affidavit sworn and filed 20 December 2007;
Unsworn Financial Statement filed in Court on 24 November 2008 which the husband verified on oath in oral evidence;
Unsworn affidavit filed in Court on 24 November 2008 which the husband verified on oath in oral evidence.

Mr Kendall Snr

Affidavit of Ms A Kendall sworn 31 October 2007;
Affidavit of Mr Kendall Snr sworn 29 August 2007;
Affidavit of Mr Kendall Snr sworn 31 October 2007.

Mr A’s report

A central issue in this case was whether a transfer signed by the husband and his father was signed in 1996 or 2006. The matter was adjourned part heard to allow Mr A to forensically examine documents and his report is Exhibit “U”.

CREDIT

Wife

The wife signed with the husband some of the incorrect written statements to financial institutions but said at various stages she had been kept in the dark about what the arrangements were between her husband and his father.
There were occasions there the wife’s demeanour clearly indicated to me that she was relating exactly her perception of what happened at that time. An example was when she was talking about the husband’s acquisition of the T property. There were some other occasions however where the wife’s interpretation of what had happened in a particular circumstance was quite subjective. She referred on occasions to “her savings” when I find monies had been accumulated by the personal exertion of both parties. The wife said she knew nothing about a $25,000 amount that had been deposited into her own account. The wife was, on occasions, less than impressive as a witness.

Husband

The husband clearly made inaccurate written statements to financial institutions from time to time. He told them that he owned the R unit and was receiving rents from it when he was not. He also failed to disclose to the bank the further borrowing of $200,000.00 from his father when the sports business was being acquired. The husband conceded openly that he hadn’t been frank with financial institutions.
I however found him a fairly open and candid person and I did not at any point feel that he was deliberately attempting to mislead me.
Counsel for the wife charged the husband with not properly disclosing material relating to his share trading. The main complaint was that the husband failed to produce documents under a subpoena which was made returnable on the first morning of the trial. The husband established to my satisfaction that the wife had documents relevant to the husband’s share trading for about a year prior to the final trial.
In the end not much turns on findings of credit as between the husband and wife. The husband concedes that he did not fully inform the wife about what was happening with the R unit throughout the marriage. Whilst the parties have different perceptions of things that have happened during the time they were together, those differences are of little weight when determining the ultimate outcome of alteration of property between the parties. If I have to choose, I would generally prefer the evidence of the husband over that of the wife unless otherwise indicated on a particular issue.

CHRONOLOGY

In 1989 after the death of the husband’s mother, probate was granted in respect of her estate. The R property was bequeathed to the husband to be held on trust for the husband until he attained the age of 30 years. The husband was about 25 years old at the time of his mother’s death. At the date of the probate the R property had a value of approximately $149,000.00 according to the probate documents.
In December 1989 the husband and wife commenced a relationship. At that time the husband was living at the R property. He lived there until 1995.
The wife says that prior to their marriage she had approximately $50,000.00 in savings.
In 1992 the parties married and commenced to reside together at the R property.
The wife alleges that the husband and wife undertook improvements to the R property including minor repairs, installation of blinds and curtains, replacement of a hot water service, new carpets, new light fittings, repairs and maintenance to the bathroom. The husband disputes the extent of those improvements. Nothing of significance turns on this dispute.
At the date of the marriage the wife was working in a profession. She held a senior position with a professional firm on a full-time basis. She says that at that time she was earning approximately $70,000.00 gross per annum.
At the date of the marriage the husband was studying on a full-time basis.
The wife says that her income supported the parties after the marriage. The husband says that he had some monies from previous employment. I accept the husband’s version.
The wife says that in May 1994 the parties travelled overseas for a 12 week holiday which cost approximately $30,000.00 - $35,000.00. The wife says that it was her income at the time that funded that overseas trip.
The husband and his father say that Mr Kendall Snr deposited $25,000.00 into the parties’ account on 6 September 1994. This money was initially provided on an interest free basis.
Between late 1993 and 2005 the husband was engaged in providing professional services to various firms and companies, either on a part-time basis or a full-time basis.
He also involved himself in trading shares, futures and options in both his name and the names of two companies which he controlled.
In mid 1995 the parties moved out of the R property and rented premises in Sydney’s inner suburbs. The R property was rented to a family friend, Ms K.
Thereafter, the R property was rented to an acquaintance of the husband, Mr B, and then to another acquaintance of the husband, Mr Y.
On 1 July 1995 the wife was promoted to a salaried partner in the firm with an approximate income of $110,000.00 gross per annum.
The first child of the marriage, C, was born in September 1995. The applicant worked up until the night prior to C’s birth.
In January 1996 the wife returned to work at the professional firm for three days per week. C was cared for by a nanny on one day and in day care for the other two days. The husband was also involved in attending to C when the wife was at work.
In May 1996 the parties purchased the property at W Street (“the W Street property”) for $450,000.00. An amount of $325,000.00 (with the earlier amount of $25,000.00 totalling $350,000.00) was advanced by the husband’s father. There is controversy as to whether $150,000.00 of these monies was the consideration for the transfer of the R property by the husband to his father. The husband and his father say that on 17 May 1996 a transfer was executed whereby the husband transferred to his father the R property for the consideration of $150,000.00. This transfer was not registered upon the title of the property until 9 November 2006. The issue of when the transfer was signed is dealt with in more detail below.
On 22 May 1996 the wife’s partnership with the professional firm was terminated. The wife was paid an ex gratia payment of $25,000.00.
The wife commenced unfair dismissal proceedings against the firm.
The wife then did not work but looked after C. She was also pregnant with O during 1996.

In 1996 the husband set up a self-managed superannuation fund (“the [U] Superannuation Fund”). The ex gratia payment received by the wife was rolled into this account.
O was born in January 1997.
In December 1997 the wife commenced a part-time position at F Business three days a week earning approximately $95,000.00 gross per annum plus superannuation.
In early 1998 the wife received a damages award of $65,000.00 net as a result of the unfair dismissal claim against the professional firm. Those funds were placed into a term deposit with the National Australia Bank (“NAB”).
In February/March 1999 the wife accepted a redundancy from F Business following a take over by another company and received a redundancy package of approximately $8,000.00 - $9,000.00 net which was deposited into the U Superannuation Fund.
In May 1999 the wife commenced in practice as a sole practitioner initially from her bedroom at home.
Between mid 1999 and mid 2005 the husband conducted all bookkeeping, taxation and financial affairs for the wife’s professional practice. The wife throughout the hearing claimed that she had little knowledge as to the financial affairs of her practice or how bookkeeping and taxation services for that practice were performed. She also said throughout the marriage she left the financial affairs of her husband and herself to her husband to look after.
In 2000 the wife purchased a commercial office at P from which she thereafter conducted her practice.
In August 2000 W was born.
The wife continued to conduct her practice without taking any significant time off.
In May 2001 the parties sold the W Street property for $690,000.00. The NAB mortgage was discharged in the sum of $357,573.00. The balance of the sale proceeds were in the sum of $262,267.00. This amount was paid to D Pty Ltd. Counsel for the wife in final submissions said the husband had not properly accounted for how the proceeds had been expended. I do not agree. The husband has accounted to my satisfaction for the monies from the sale of W Street. Primarily they were eventually used in the development of the sports business which had significant renovations done to its premises after its acquisition.
All parties agree that an amount of $149,000.00 was paid to Mr Kendall Snr at this time (May 2001). The husband and wife agree that at this time the husband informed the wife that the debt to his father had been extinguished.
It is the position of the husband and Mr Kendall Snr that the payment of $149,000.00 did in fact extinguish the then debt between them. As discussed later, I ultimately accept that is so.
Between May 2001 and October 2004 the parties resided in rental accommodation at B (“the G property”).
In June 2003 the husband and wife purchased commercial premises at M (“the M premises”) through which they proposed to conduct a sports business. The amount of $184,000.00 was expended in renovations done in the first year to the premises.
The wife says she believes that the proceeds used to purchase the M premises comprised of a mortgage from Westpac in the sum of $400,000.00, together with the proceeds of sale of the W Street property. The parties entered into an equipment/hire purchase loan to fund some renovations to the M premises. That loan was repaid using takings from the business conducted in the M premises and therapist rentals (see paragraph 148 of the wife’s affidavit filed 29 October 2007).
In January 2004 to late 2005 the husband and wife commenced and conducted a sports business from the M premises. The wife during her oral evidence indicated that this was really the husband’s business. The husband worked in the business on a regular basis. A number of therapists rented out rooms in the premises.
From 1 November 2004 to July 2005 the husband and wife resided in rental accommodation at L (“the L property”) paying rent of approximately $5,900.00 per month.
In May 2005 the husband resigned from his employment as a consultant with a professional firm. In May 2005 to December 2005 the wife claims she took over the management of the M premises and solely conducted opening and closing of about 80 per cent of the business.
In May 2005 the husband and wife negotiated the lease of the main floor of the M premises to another company.
In May 2005 to July 2005 the wife says that the husband commenced share trading activities on a full-time basis.
In July 2005 the parties entered into a contract to purchase a property at T (“the T property”).
The wife initially said that the husband had informed her that he had agreed to purchase the T property. It was clear however that both the husband and wife signed the contract. The wife said that she knew what she was doing. She said, however, that she felt the husband was “holding a gun to her head” because he said that unless she signed the contract the marriage was over. She had three young children and she did not want the marriage to end. The husband did not accept this version but whatever the truth about the signing of the contract for the T property, it is clear that the wife had second thoughts about signing that contract shortly after she did it, and it was this event that precipitated the breakdown of the marriage.
In August 2005 the wife signed a loan agreement with Westpac to fund the purchase of the T property. The T property was purchased with a mortgage from Westpac in the sum of $450,000.00 and a 60 day overdraft extension on D Pty Ltd of $50,000.00 guaranteed against the M premises, and an extension of the mortgage on the M premises of $50,000.00.
In August 2005 the wife and Mr Kendall Snr met the costs of stamp duty on the T property. The deposit on the T property was paid from the wife’s fees generated through her professional practice.
In July/August 2005 the husband took possession of the T property and resided in the property between July 2005 and September 2005. The wife remained at the L property.
The parties separated on 27 September 2005.
On 2 November 2005 the lease on the L property had expired. The wife could not afford to continue rental payments on the L property and moved to new rented premises at C (“the C property”) with a monthly rental of $3,033.00.
The wife and the three children of the marriage have continued to reside at that property to the current time.
On 27 July 2006 the wife filed an application for final property orders.
In August 2006 the wife lodged a Caveat on the R property.
On 30 August 2006 stamp duty was paid by the husband’s father on the transfer of the R unit to him by his son.
On 11 October 2006 Mr Kendall Snr served a Notice of Proposed Lapsing of Caveat on the wife. An extension was not sought by the wife. An application was made to the Family Court seeking injunctions against the husband from dealing with the R property.
On 26 October 2006 the Family Court made orders on an interim basis inter alia ordering a sale of the M property and restraining the husband (who was the registered proprietor of the property at that time) from transferring, further encumbering or otherwise disposing of his interest in the R property.
On 9 November 2006 two transfers were lodged at the Department of Lands in relation to the R property. The first transfer was a transfer from the husband, Mr Kendall Snr and Ms A Kendall as executors/trustees of the estate of the late Mrs Kendall Snr to the husband. The transfer is dated 17 May 1996 and the effect of the transfer is that property is transferred from the husband’s mother’s estate to the husband for nil consideration.
The second transfer lodged the same day is a transfer in the title of the property from the husband to Mr Kendall Snr for a consideration of $150,000.00. The date of the second transfer is 17 May 1996. The stamp duty imprint on that transfer is dated 30 August 2006 and describes the “dutiable” amount in the sum of $175,000.00.
In December 2006 the husband and wife divorced.
In early 2007 the wife filed amended taxation returns for the financial years ended 30 June 2003 and 30 June 2004. This generated an income tax liability of $70,000.00 and an additional liability for the wife to repay childcare benefits and family tax benefits in the sum of $2,600.00.
In early 2007 the husband established CA Pty Ltd. The husband works for that company. The company contracts the husband’s services to third parties.
On 17 December 2007 the wife sold the P property for a sale price of $220,000.00 (inclusive of GST). The wife received a total of $210,815.83 following settlement. An amount of $20,000.00 was paid to the Australian Taxation Office in respect of GST arising from the sale. The remainder has since been spent by the wife on legal fees, school fees, medical, clothing, sporting and extracurricular expenses for the children of the marriage.

SECTION 106B APPLICATION

The husband’s father, the second respondent, is the current registered proprietor of the property at R. The property has an agreed value today of $440,000.00.
Part of the final orders sought by the wife in this matter consists of an application under s 106B of the Act to set aside the transfer of the R property by the husband to Mr Kendall Snr. Section 106B(1) states that “in proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order”.
As stated above, on 9 November 2006 a transfer dated 17 May 1996 was lodged at the Department of Lands which transferred the title of the R property from the husband to Mr Kendall Snr for a consideration of $150,000.00. The stamp duty imprint on the transfer is dated 30 August 2006.
The transfer was purported to be pursuant to written agreements entered into in 1996. Those agreements were tendered in evidence and became Exhibit S and Exhibit T.
Exhibit S is in the following form; is undated, but signed by the husband and his father:

Advance of Funds

Advanced by

-

[Mr Kendall Snr]

Purpose

-

Partial funding of purchase of [W Street property]

To

-

[The husband]

Amount

-

$200,000

Commencement date

-

17 May 1996

Term

-

At Call

Interest

-

At a percentage to be mutually agreed upon but not exceeding Cash Management Rate.

Insurance

-

[Husband] to take out term-life policy sum Insured $200,000

Exhibit T is in the following form; is undated, but signed by the husband and his father:
Agreement for the sale of property at [R]
[The husband] agrees to the sell the above property to [Mr Kendall Snr] for the consideration of $150,000.
[Mr Kendall Snr] has previously advanced an amount of $25,000 being a deposit on sale of the above property.
The balance of the purchase price ($125,000) is to be paid by [Mr Kendall Snr] on May 17, 1996.
On payment of the balance of the sale price [the husband] agrees to waive all rights in respect of the above property, as detailed in the last will & testament of [the husband’s mother].
The wife asserts that Exhibit S and Exhibit T were created in 2006 and backdated. The husband and Mr Kendall Snr assert that it was created in 1996 and there was a delay in registering the transfer.
Exhibit U in the proceedings is a report by Mr A, a forensic document examiner. The purpose of obtaining that report was to gain some objective evidence as to whether Exhibits S and T were created in 1996 as the husband and Mr Kendall Snr allege or whether they were created in 2006 following separation as the wife alleges. At its highest the report can be used as evidence that Exhibits S and T could have been created in 1996 as the husband and Mr Kendall Snr assert. The report is equivocal and cannot provide a clear answer one way or the other.
It is useful, when considering the authenticity of Exhibit S and Exhibit T to set out a short chronology:

1988

The husband’s mother died.

1989

Husband moves into the R unit

1992

The parties married and the wife moves into the R unit with the husband and improvements are carried out.

6 September1994

The husband and his father say that the husband’s father deposited $25,000.00 into the parties’ account.

Mid 1995

The husband and wife moved to rental premises in inner Sydney and thereafter the R unit is occupied sequentially by Ms K, Mr B and Mr Y.

May 1996

The husband’s father provides $329,000.00 to the parties to assist the husband and wife purchase W Street and the husband and his father allege that the agreements which are Exhibit S and Exhibit T are signed by both of them.

May 2001

W Street is sold by the husband and wife. An amount of $149,000.00 is paid back to the husband’s father. Both the husband and wife agree that the husband informed the wife at that time that the debt to the husband’s father had been repaid.

10 June 2003

The respondents assert that the husband’s father provided the sum of $200,000.00 to the husband to assist him to purchase a sports business. There is no doubt the $200,000.00 was paid by the father and there is a cheque stub to that effect. Counsel for the wife conceded that the cheque had been cashed.

8 July 2003

The husband deposited $50,000.00 into his father’s account.

September 2005

The husband’s father helps pay stamp duty on T property in the sum of $20,247.00.

September 2005

The parties separate.

4 November 2005

The wife deposited $10,000.00 into the husband’s father’s account.

August 2006

The wife lodges a caveat on R property.

14 August 2006

A retrospective valuation is prepared by Quaid Partners.

30 August 2006

Transfers in relation to the R unit are stamped.

9 November 2006

Transfers in relation to the R property are registered.

20 April 2007

The husband’s father commenced a statement of claim in the District Court against his son claiming an outstanding amount of principle of $160,242.00 together with interest of $54,142.00. The husband’s father obtained judgment against the husband.

9 May 2007

The husband’s father issues a writ for an amount of $217,374.00 in the District Court against the husband and the amount remains outstanding.

A number of matters were the subject of evidence which might given an indication one way or another as to whether or not Exhibit S and Exhibit T were created in 1996 or 2006.

Evidence in relation to the payment of monies to the parties by the husband’s father and by the parties to the husband’s father

The wife stated in cross examination that it was her understanding when the W Street property was purchased in 1996 for $450,000.00, it was funded by $100,000.00 from the husband and wife and $350,000.00 borrowed interest-free from Mr Kendall Snr. In her oral evidence, the wife stated that it was her understanding that “there was one amount loaned. There was one loan for one amount, so it was our money – our money and the one amount from your dad to buy the [W Street] property and we would pay him back at 1000 a month, because it was much better than going to a bank and paying interest”. This evidence is not consistent with the statement in the wife’s case outline which says this $100,000.00 came from “her savings”, but nothing turns on that but perhaps issues of credit. The wife stated that that figure of $1,000.00 for the monthly repayments was an agreement reached between the husband and Mr Kendall Snr.
It was put to the wife by the husband that Mr Kendall Snr originally offered to advance $150,000.00 and subsequently increased it to $350,000.00, and that second amount of $200,000.00 became the actual loan in respect of which the parties repaid $1,000.00 monthly. The wife did not accept that that had been the case.
The husband put to the wife that Mr Kendall Snr deposited an amount of $25,000.00 into the parties’ account on 6 September 1994. The wife stated that she could not recall that happening. The husband suggested that the wife had declared, on her tax return, interest paid on that loan in 1995, however the wife replied that the husband prepared her tax returns on her behalf and she trusted him in that respect.
I find as a fact that $25,000.00 was paid to the parties by the husband’s father in September 1994. Exhibit K contains a deposit receipt evidencing the payment of $25,000.00 into the wife’s account on that day. Exhibit K also contains a document which the husband’s father prepared at the time setting out the terms on which the $25,000.00 was lent. There is also a record after 6 September 1994 of regular repayments of $100.00 on a monthly basis as part payment in relation to that debt ($1,000 was paid in all at this time). The husband’s father’s evidence about this was that he was approached by his son who said that he and the wife were going to go to an auction to bid for a house and they wanted a $25,000.00 amount to cover the deposit. Mr Kendall Snr says that on 6 September 1994 he drew cheque number 436 on his CBA streamline account in the sum of $25,000.00. The parties were not successful in acquiring the house that they wished to acquire at auction. There was then a conversation between father and son and Mr Kendall Snr agreed that his son could hold the $25,000.00, I infer for the purpose of subsequently acquiring property. That amount was subsequently used in the acquisition of the property at W Street.
When cross examined by Mr Kendall Snr, the wife stated that the first she knew of that sum of $25,000.00 was in these proceedings. I have some difficulty accepting this evidence given the $25,000.00 was deposited directly into the wife’s account.
Mr Kendall Snr asserted that he provided $25,000.00 to the husband and wife to assist them in the purchase of a property. The wife stated that she was unaware of the provision of that money and questioned why she and the husband would have any need of it, given that they had funds of their own with which to purchase a property. Mr Kendall Snr disputed that, stating that the wife paid interest on that amount in the sum of $800.00 one year and $1,250.00 the next year. The wife stated that she regularly signed blank cheques on that account and if she was paying interest on the $25,000.00 then she had no knowledge of it. Mr Kendall Snr stated that he received the interest from the wife in cash, which the wife denied. Mr Kendall Snr agreed when asked by me that he had never, prior to raising this issue with the wife in cross examination, disclosed that he had received interest payments from the wife in cash.
Exhibit J consists of deposit slips made out by the husband in respect of payments made to Mr Kendall Snr from 1996 to 2001. Those deposits total approximately $50,000.00. I note that this sum, together with the $149,000.00 paid following the sale of the W Street property, would represent the repayment of the $200,000.00 loan from Mr Kendall Snr to the parties, the remaining $150,000.00 being accounted for via Mr Kendall Snr’s purchase of the R property. Exhibit J corroborates the version given by the husband and his father.
The wife stated that following the sale of the W Street property, she had a conversation with the husband in which he assured her that the debt to Mr Kendall Snr had been fully repaid. This can only be accurate if the husband and his father’s version of what happened at the time of the sale of W Street is accepted. The wife now states that it is her understanding, from perusing the documents with which she has been provided, that there was an outstanding debt after the W Street property was sold in 2001. The wife agreed that the parties’ paid $1,000.00 a month to Mr Kendall Snr from May 1996 when the W Street property was purchased until May 2001 when it was sold. She stated that she was unaware of the continuation of further regular payments until she had a conversation with the husband in August 2005 when she questioned him as to why the parties were making payments to Mr Kendall Snr when they did not owe him anything.

In terms of the repayment of the loan to Mr Kendall Snr, the wife states that he was paid $1,000.00 a month over a ten year period from 1996 to 2006 ($120,000.00) as well as $149,000.00 when the W Street property was sold, making a total of $269,000.00 repaid and $81,000.00 still to pay on the original $350,000.00 loan. Mr Kendall Snr disputes that. He states that he was repaid $50,000.00 between 1996 and 2001, together with $150,000.00 that was repaid when the W Street property was sold. The remaining $150,000.00 represents the consideration for his purchase of the R property. Mr Kendall Snr asserts that although he received amounts on a regular basis from 2001 to 2006, those amounts were not consistent payments of $1,000.00 a month and that money in fact represented the rent due to him from the tenancy of the R property, and he did not receive any of the husband’s and wife’s money.
The husband’s sister, Ms A Kendall, swore an affidavit on 31 October 2007 in which she related a telephone conversation with her father in 1996 who said to her words to the effect:
“[the husband] and [the wife] are buying a house and need some money. It is proposed I pay [the husband] $150,000 as consideration for the transfer of ownership of the [R] unit to me.”
The purposes of the phone call from Mr Kendall Snr to his daughter was to get her agreement to that course of action as at the time she was one of the registered owners of the R unit in her capacity as one of the executors of her mother’s estate. Ms A Kendall was not tested in relation to that evidence and I accept its accuracy.
That evidence is confirmed and corroborated by Mr Kendall Snr (see paragraph 8 of his affidavit of 31 October 2007).

Was $150,000 a realistic consideration for the transfer of the R unit in 1996?

There was some attention in the evidence directed to the question of whether or not the husband could have realistically thought in 1996 that $150,000.00 was a realistic consideration to receive from his father in exchange for the transfer of the R unit to his father.
As mentioned above, Exhibit O is a valuation that was conducted in respect of the R property on 14 August 2006 (seemingly obtained for the purposes of stamp duty). The valuation gives a value to the R property of $175,000.00 as at 16 May 1996.
At paragraph 72 of her affidavit filed 29 October 2007 the wife draws attention to the fact that the R property was valued at $149,000.00 at the time of the grant of Probate in 1989, and at the time of the transfer on 17 May 1996 the property was transferred at $150,000.00. The wife asks me to accept that the husband knew in 1996 that the R unit had increased in value more than $1,000.00 over the course of seven years and I do.
At paragraph 69 of her affidavit filed 29 October 2007, the wife states as follows:
Prior to the First Respondent and I moving from [R] to rental accommodation in [inner Sydney] in 1995 we regularly kept and eye on the value of property in that same block. The First Respondent and I became friendly with an elderly lady by the name of [RY] who resided in a unit with the same aspect as ours on the 16^th floor. On one occasion in 1995 we attended [RY’s] unit and discussed with her unit values and what ours may be worth. Following that meeting the First Respondent said to me words to the following effect:- “[RY’s] unit is on the 16^th floor and she has had a real estate look at it. Her unit is on a higher level but has the same aspect as ours. I think having looked at what they are asking in Saturday’s Heralds over past months, having spoken to [RY] who has been given a value of at least $350,000.00 and looking at what Real estate are advertising, asking for and have obtained from other recent sales in the block, our unit must be worth at least $300,000.00.” We regularly discussed the Unit’s value during 1995 when I was pregnant with our first child [C] in terms of what we would do once the baby was born and whether we would sell the unit and move to larger accommodation.
This evidence on the part of the wife is relevant to what the husband may have believed was the value of the R property in 1995, the year prior to his transfer of the property to Mr Kendall Snr for a consideration of $150,000.00. There is certainly a disparity between what the wife says that the husband believed in 1995 and what he subsequently transferred the property for in 1996.
The wife was asked questions about paragraph 69 of her affidavit during cross examination. The husband put to her that RY’s unit actually faces west, whereas the parties’ unit faces east. The wife stated that she thought the two units had the same aspect, but she may be incorrect. The husband also put to the wife that RY sold her unit to her cleaner for $150,000.00. The wife stated that she was unaware of that. The wife acknowledged that the last sentence of paragraph 69 gives a wrong impression as to the conversations she says the parties were having at that time. She stated that she should have specified that she was aware at that time that the husband would not become entitled to the R property until his 30^th birthday. The wife agreed with the proposition that the parties could not have sold the R property prior to the husband’s 30^th birthday because it was in the name of the executors of the husband’s late mother’s estate. The wife stated that she and the husband first discussed selling the R property when she was pregnant with C. That was before the husband’s 30^th birthday, and the wife states that the parties discussed how they would have to wait until the husband turned 30 before taking any steps in that regard.
At paragraph 86 of her affidavit the wife states as follows:
The First Respondent said words to the following effect (in my presence) to my family and our two eldest children, [C] and [O]:- “[the wife] and I would like to hold on to the [R] unit as it is a great location. Its [sic] holding its value and keeps increasing in value. Also, it will be great for the boys when they are young adults and are at Uni or wish to have their own pad away from us”. The First Respondent and I regularly spoke jointly to our family and friends with words to the following effect “Our unit at [R]”, or “the unit we own at [R]”.
It is probable that the husband knew that the R unit was worth more than $150,000.00 in 1996. That however does not, in my view, exclude the possibility that the husband may have been at that time willing to enter into the agreement as alleged between he and his father. The unit after all had been willed to the husband by his mother on the basis he take it when he was 30 years of age. He was still 28 years of age and still not entitled to take the R unit as the registered proprietor.
There is of course the issue as to whether or not the R unit could have been transferred to the husband in 1996. The fact that his mother’s will did not allow the property to come to him for another two years in itself might have been a reason why a transfer was not prepared at that time. As much was conceded by counsel for the wife in final submissions, although as discussed, it would have been possible to create a transfer should all relevant parties have consented to that course.
The husband wished to borrow funds from his father to acquire property. The fact that the husband knew or should have known the unit was worth more than $150,000.00 at the time he transferred it does not, in my view, prove that the asserted agreement with his father was not reached in 1996.

How were rents accounted for?

As part of her argument, the wife wishes to highlight how rental monies from the R unit were used from time to time.
The wife did agree during cross examination that the R property was leased to a family friend, Ms K, for minimal rent for a period of approximately 18 months prior to the husband’s 30^th birthday. The wife stated that she assumed the husband was collecting the rent on the property and applying it to outgoings, although she acknowledged that she never saw the husband collecting the rent and it was never deposited into the parties’ bank account. The wife acknowledged the possibility that the husband’s sister was collecting the rent and giving it to Mr Kendall Snr, although she stated that if such an arrangement was in place, she did not know about it.
Annexure B to the wife’s affidavit filed 29 October 2007 is a series of emails between the husband and Mr Y, who was the tenant at the R property for a period of time. The emails contain various references to Mr Y paying rent to the husband. It was put to the husband during cross examination that Mr Y was paying rent to the husband who considered that money his own to use for the repayment of the loan to Mr Kendall Snr. The husband denied that proposition.
The husband was also taken to Annexure C to the wife’s affidavit, which shows a deposit into the parties’ joint Westpac account of a sum of $1,910.00 from Mr Y. It was put to the husband in cross examination that this contradicts his statement that the rent obtained from the R property tenant was always paid to Mr Kendall Snr, albeit sometimes late. The husband stated that at the time of the purchase of the T property he was in financial trouble and Mr Kendall Snr allowed him to keep the rent money for his own use.
Counsel for the wife questioned the husband about why, if the R property was in fact being tenanted by people who, by virtue of their tenancy, owed money to Mr Kendall Snr, they did not simply send rental cheques directly to Mr Kendall Snr. The husband stated that he was happy to help. When asked why he did not provide receipts to the tenants for rental payments received from them, the husband stated that the arrangement was one of mutual trust.
As mentioned elsewhere, it is the husband’s case that he told the wife in 2001 after the sale of the W Street property that the debt to Mr Kendall Snr had been repaid. The husband’s case is that the payments made to his father relatively regularly from 2001 to 2005, shown in Annexure AJK 1 to Mr Kendall Snr’s affidavit filed 7 November 2007, consisted of rent payments in respect of the R property. The husband stated:
You know the document I am referring to?---Yes, I do. They were rent payments for the unit at [R]. Essentially for the majority of that period the unit was rented to people that I worked with and because of that, for convenience, they would pay me rent in cash and then I would remit it to my father's account.
Now, how would you do that?---It would've been done by cheque in the main. Occasionally, cash but the majority of the time would've been cheque.
Well, you'd receive a cheque from the tenant. is that what you are saying?---No, the tenant worked obviously in the same office as me so he would pay me cash on a monthly basis.
So never by cheque; always by cash. Is that correct?---That's correct, yes.
You would then use that cash for your own purposes not necessarily always banking it?---Look, sometimes there would've been a delay if we were short in me remitting it to my father but - - -
When you say you'd remit it to him; did you transfer the cash to him or did you provide him with a payment out of an account?---It was - - -
How did it work?---In most cases there were cheques drawn either from my company account or from the applicant's NAB cheque account and they were remitted to him.
An examination of annexure AJK 1 shows that most of the time, the husband paid his father regular monthly payments of exactly $1,000.00 between 1998 and 2001. Subsequently these amounts became somewhat less regular, both in timing of payments and amounts paid.
It is difficult to draw any firm conclusions by simply looking at annexure AJK 1 to the husband’s father’s affidavit of 31 October 2007. That document is at least equivocal as to whether or not the payments being made to the husband’s father after 2001 are the husband reimbursing the father for rent monies he collected or whether or not they were the repayment of monies still outstanding by the parties to the husband’s father. The payments after 2001 are less regular in form and timing than before.
I find that the evidence in relation to payment of rental monies does not assist me one way or the other in determining the authenticity of Exhibit S and Exhibit T.

Statements the wife says the husband made to her

The wife was asked whether she was aware at any stage that the R property was registered in the names of the three trustees. The wife stated that on the husband’s 30^th birthday the husband told her “it would all be fixed up and I just assumed that he had gone and had it transferred into his name”. The wife stated that she was unaware that the R property was still in the names of the three executors until she did a property search after separation.
The wife stated in oral evidence that the husband told her on his 30^th birthday that he owned the R property, and that he again made out that the parties owned the R property when the W Street property was sold and the parties were considering their options.
I note that although the wife now asserts that the repayments on the loan continued between 2001 and 2006, she believed at the time that the W Street property was sold, as a result of conversations with the husband, that the loan to Mr Kendall Snr had been fully repaid. She says she became aware of the payments continuing after the sale of the W Street property as a result of examining Annexure AJK 1 to Mr Kendall Snr’s affidavit filed 7 November 2007, which indicates relatively regular payments from the husband to Mr Kendall Snr up until 4 November 2005.
As mentioned below, Exhibit H to the wife’s affidavit (an email written by the husband to a Mr CR), contains an admission by the husband that he had during the marriage held out to the wife that he was the owner of the R unit. This corroborates to some degree the wife’s assertion that she was in the dark about what the financial arrangements had been from time to time between her husband and her father-in-law.
The wife submits that the husband’s own evidence was that the 1996 document was created in case he was hit by a bus but I do not remember him saying this.

Statements made by the husband to financial institutions and others

There is no doubt that on at least four occasions after 1996, the husband represented to financial institutions when seeking funds from them that he was the owner of the R unit. The following documents are relevant (references to annexures are those with the wife’s affidavit sworn 29 October 2007):
141.1.Annexure D dated 28 April 2003, being a finance request to Westpac signed by both the parties. In that document the husband asserts he is the owner of the R unit and gives the value of the R property as $385,000.00 as at April 2003.
141.2.Exhibit M dated 10 January 2005, being a statement of assets and liabilities signed by the husband.
141.3.Annexure E, which is a loan application for the borrowing of T property on 8 August 2005 (although the relevant page of the loan application is missing from the annexure);
141.4.Annexure F, which is a letter signed by the husband to Westpac dated 27 May 2006 with the sentence “The property at [R] is debt free and will not be sold. This property is currently rented for $1,200 per month”.
141.5.Statement of assets to Westpac by the husband dated 27 May 2006 indicates that one of his assets is the R unit which he at that time ascribed the value of $425,000.00.
The wife also has a copy of a letter that she wrote to the husband dated 4 August 2005 which the husband annotated in his own handwriting. In relation to the R unit, the wife’s letter says “I thought we owned it?”. The husband has annotated that by the words “I owned it”. That annotation however has to be read in the context of the wife responding to an assertion by the husband that “rent for [R property] is paid to my father”.
The husband wrote two emails to Mr CR (annexures H and I to the wife’s affidavit) about his ownership of the R unit on 23 March 2006 which were published to the wife. These letters might be said to demonstrate the husband’s ambivalence about what he believed the arrangements to be in relation to the R unit between he and his father.
Exhibit H makes it clear that the husband had represented to his wife that he was the owner of the R unit. The emails however also demonstrate that the husband’s father had a genuine and strong view that he had re-acquired ownership of the R unit in 1996.
It was clear throughout the hearing that Mr Kendall Snr did in fact have a strong conviction that this was his unit and it should not be part of the assets brought to account in the matrimonial settlement between his son and his daughter-in-law.
I do not place great weight on statements made by the husband to financial institutions in determining whether or not there was an agreement between the husband and his father in 1996. In the end, nothing that the husband has said to financial institutions or others persuades me that there was some conspiracy entered into between the husband and his father in 2006 to concoct documents that looked like they were created in 1996.
The wife submitted that if the intentions of the documents were bona fide there would have been no reason why the husband and his father did not disclose the arrangement they had entered into to the wife, her family members and all financial institutions during the course of the marriage. With respect to the wife’s submissions, the lack of disclosure does not necessary evidence malefides on the part of the husband’s father. Although, as I have already commented, it probably was that the husband said things to the wife and to financial institutions that did not reflect the actual agreement that he had with his father in 1996.

Statements made by the husband’s father

Mr Kendall Snr stated that the transaction that took place on 17 May 1996 was not registered officially right away because of health problems (he said prostate cancer) that he was experiencing at that time, which it was thought would impact on his life expectancy.
Mr Kendall Snr states that of the $350,000.00 that came from him and was applied towards the acquisition of the W Street property, $200,000.00 was an interest-free loan and the remaining $150,000.00 was paid to the husband and wife in consideration of Mr Kendall Snr’s purchase of the R property. The wife disagreed that that was the case. She was asked whether she had any discussion with Mr Kendall Snr at the time he advanced the money as to what the terms of the loan were. Her evidence on that point was as follows:
At the time the money was advanced by Mr [Kendall] Snr, you had no conversation with him directly about what the arrangement was, is that accurate?---There was some conversation about the 1000 a month being reasonable and it was best not to go to a bank. Why on earth would you go and pay money to a bank? That was all, but how it was made up, no.
Was that conversation with him or with your husband?---Sorry?
Was that a conversation you had with him or with your husband?---With my husband. There may have been one conversation with [Mr Kendall Snr] about "Why would you go and pay a bank interest, I have the money and I'm happy to loan it to you. Don't go to a bank."
Mr Kendall Snr stated that when the husband and wife purchased the W Street property, the husband was only 28 years old and therefore an agreement was reached among the trustees that the R unit would be transferred to Mr Kendall Snr for an amount of $150,000.00 in order to assist the husband and wife fund their purchase of the W Street property. Mr Kendall Snr states that he never discussed that with the wife.
The wife made the submission that the husband’s father did not give any evidence that rental income had been declared on his tax returns after 1996 nor on the evidence that he made declarations to Centrelink for that purpose. The husband’s father, however, was not asked any questions about those matters in cross examination and I place little weight on this submission by the wife.

Conclusion about the wife’s application pursuant to s 106B FLA

I conclude, taking into account all the evidence presented on the topic, that Exhibit S and Exhibit T are genuine documents that were created in 1996. There is no suggestion by the wife that in 1996 it could be said that any anticipated order might be made under s 79 of the FLA. Accordingly, there is no basis under s 106B(1) of the FLA to set aside the written agreement between the husband and his father contained in Exhibit T.
That agreement of course did not effect a change to the legal title of the property (only a change to the beneficial interest). The change to the legal title of the property happened when the transfers in relation to the R unit were signed and registered.
The wife’s original application was not that the beneficial disposition in Exhibit T be set aside, rather that the transfer which is Annexure Q to the wife’s affidavit of 29 October 2007 be set aside.
There was no specific focus during the hearing on when it was that the transfer which is annexure Q to the wife’s affidavit was signed by the husband and his father. The date on the document is 17 May 1996. The original of this document would be at the Registrar General’s office. It was not the subject of analysis by Mr A. The document was prepared by the husband’s father’s lawyers, TH Drake & Associates. Their conveyancing file was not in evidence, nor was Mr Drake or anybody from his office called on the question of when that transfer was actually prepared and signed by the husband and his father.
It is however, I think, safe to infer that the transfer was not prepared and signed by the husband and his father until about August 2006, given that the retrospective valuation prepared by Quaid Partners was not prepared until 14 August 2006 and the transfers were not stamped until 30 August 2006. That is, the transfer was signed by the husband and his father after the parties separated and not only at a time when proceedings under the FLA might have been anticipated but also at a time when there were actually existing proceedings (the wife having filed an application for final property orders on 27 July 2006).
The wife also complains that the transfer (Exhibit Q) was signed after 26 October 2006 when the court had made an injunctive order restraining the husband from transferring/further encumbering or otherwise disposing of his interest in the R unit.
The transfer of the legal title could be said to be a breach of that order. However, I find that there was an agreement in writing between the husband and his father for the transfer of the R unit in 1996 for a consideration of $150,000.00 and that the husband’s father provided that consideration to the husband. The transfer of the beneficial interest in the R unit happened ten years before the injunctive order was made.
Accordingly, the beneficial interest in the R property was held by the husband’s father since 1996, notwithstanding the fact that between 1996 and 2006 the executors of the husband’s late mother’s estate were the legal owners on the title of the R unit. The husband in fact was only the legal owner of the R unit in his own right momentarily as the two transfers (annexures P and Q to the wife’s affidavit) were lodged simultaneously at the Land Titles Office.
The facts in this case give me the discretion to set aside the transfer which is annexure Q to the wife’s affidavit, as I find that it is a disposition of the legal title of the R unit which irrespective of intention, was likely to defeat a claim by the wife in existing proceedings.
However, this discretionary relief is subject to the protection of bona fide third parties. Section 106B(3) FLA provides that the court must have regard to the interest of and shall make any order proper for the protection of, a bona fide purchaser or other person interested.
It would not be appropriate in my view to set aside a transfer of the legal title by the husband to his father in circumstances where his father had the beneficial ownership of that property for a period of ten years prior to separation.
Accordingly, I will dismiss the application by the wife pursuant to s 106B FLA.

Wife’s alternate submission

Following the release of Mr A’s report (Exhibit U) the wife made an additional submission that even if I were to find that the transfer documents were created in 1996, then I should still take into account as against the husband and Mr Kendall Snr the fact that the documents were not acted upon for a period of approximately ten years.
The wife made a submission that even if the court found that Exhibit T was authentic, the court should still exercise a discretion under s 106B FLA in circumstances where one party to a marriage, without the knowledge and consent of the other party, disposes of a matrimonial asset to a bona fide third party for agreed consideration and if, as in this case, the bona fide third party is a close relative and the court otherwise reaches the conclusion that the transaction has only been entered into to be actioned in the event of the husband’s death or marital breakdown. The wife submitted that if the sole purpose of the 1996 document was to shield a particular property from any future claim by the wife and the children and to ensure that it stayed in the Kendall family, then I should be prepared in those circumstances to invoke the provisions of s 106B FLA in relation to the 1996 document. Implicit in that submission is that a 1996 document (Exhibit T) should be set aside on the grounds that it was entered into in anticipation of marital breakdown in circumstances where the parties were happily married and in circumstances where a separation did not take place for another ten years. I find that the parties, in 1996, did not anticipate that their marriage would break down. I am of the view that a s 106B is not wide enough to enable me to set aside the disposition in Exhibit T and I would not exercise a discretion to do so in any event.

THE HUSBAND’S FATHER’S JUDGMENT DEBT

I repeat the following facts:
166.1.On 10 June 2003 the husband’s father provided the sum of $200,000.00 to the husband to assist him to purchase a business in M.
166.2.On 8 July 2003 the husband deposited $50,000.00 into his father’s account.
166.3.In September 2005 the husband’s father helps pay stamp duty on the T property in the sum of $20,247.00.
166.4.On 4 November 2005 the wife deposited $10,000.00 into the husband’s father’s account.
The husband’s father has obtained a judgment debt against the husband in the approximate sum of $215,792.00 together with interest that has accrued since that time. The husband’s father seeks a declaration that the husband and wife are indebted to him for that amount of money.
The fact that those principal sums that forms the basis of the judgment debt were advanced is not the subject of dispute.
It was not fully explained by the husband’s father as to why it was that he only took proceedings against his son and now he wishes me to make a declaration against both his son and daughter-in-law.
When I expressed the view during final submissions that I was relatively confident that the husband’s father was not going to send the husband bankrupt, neither the husband’s father nor the husband sought to disabuse me of that thought. The husband referred to the debt to his father as a moral obligation and “that’s something I can address with him over time”. I find that it is unlikely that Mr Kendall Snr will bankrupt his son or seriously attempt to enforce his judgment debt against his son. The reality is that up until the separation, the husband’s father was comfortable in advancing these amounts to his son on the basis that they would be repaid in the fullness of time.
In Biltoff & Biltoff (1995) FLC 92-614, the Full Court acknowledged that in s 79 proceedings the court would normally deduct from the value of the assets of the husband and wife any unsecured liabilities that existed at the end of the marriage. That general practice is subject to certain exceptions, one of which is the court’s assessment as to whether or not the debt is likely to be enforced. In this case, Mr Kendall Snr’s debt needs to be recognized and taken into account but also balanced against the rights of the wife to have a just and equitable order made in her favour under s 79 FLA. There is no requirement that Mr Kendall Snr’s rights as an unsecured creditor have to be considered and dealt with prior to the court making an order under s 79. In this case, Mr Kendall Snr has fully participated in the proceedings. The husband’s father has already received some advantages from the husband that need to be recognized in some way, given that the R unit was worth more than $150,000.00 when it was transferred to the husband’s father in 1996 (on the only objective evidence I have available to me, it was worth $25,000.00 more than it was transferred for).
I also take into account that the husband’s father’s behaviour in not requiring a transfer to be registered on the title of the property for a ten year period reinforces the basis upon which I have made a finding that it is unlikely that the husband’s father will seriously enforce the debt against the husband that flows from monies advanced at the end of the marriage.
The payment and accounting of rent to the husband’s father by the husband in later years has also been less than regular and in some circumstances, when the husband has found himself in financial difficulties, his father has allowed the husband to not account to him in relation to rent and retain it for the husband’s own purposes. This all points to a fairly fluid arrangement between the husband and the husband’s father in relation to the judgment debt.
For these reasons, I do not think it is appropriate to make the order as sought by Mr Kendall Snr against the wife by way of declaration of a debt owed by the wife to the husband’s father. I also do not think it is appropriate to add the judgment debt as a liability on the balance sheet when considering what alteration of property needs to be made between the husband and wife.
In relation to the judgment debt, Mr Kendall Snr indicated in final submissions that he would be prepared to enter into some arrangement whereby some of that money was placed in trust, with himself as trustee, for the benefit of the children of the marriage. That proposal however had not been foreshadowed during the trial and was not developed fully by Mr Kendall Snr during submissions and it is still of course open to him to instruct lawyers to treat the loan in that way. The husband’s assets however do not allow repayment of this loan in the short term, so creating a trust for this asset may not be a fruitful endeavour in any event.

ALTERATION OF PROPERTY BETWEEN THE HUSBAND AND WIFE

Legal Principles

In this matter my task is to:
176.1.Identify and value the property, assets, financial resources and liabilities of the parties;
176.2.Identify relevant contributions and assess them;
176.3.Consider relevant matters referred to in Section 79(4)(d) – (g) FLA;
176.4.Ensure my order adjusting the property, assets and liabilities of the parties is just and equitable.
I intend to take a global approach to the division of assets between the husband and wife.

BALANCE SHEET

The major asset of the parties are the monies in the controlled monies account which as at 12 November 2008 were $424,165.00. Those monies would have earned some interest since 12 November 2008. A summary of the assets of the husband and wife (excluding the R property and the debt owed by the husband to his father) are set out later.
The wife currently operates a professional practice as a sole practitioner. It was agreed that that practice would be treated as having no value.
The wife satisfactorily explained that monies that she paid back on her credit card from the sale of the P property had originally been run up mostly on expenses for the children.
D Pty Ltd, a company controlled by the husband, has now been deregistered.
The draft balance sheet originally provided contained a reference to an asset entitled “Great Southern Plantation”, for which the value given is nil. During the hearing, the husband sought to point out that although the current value is nil, that investment (for which the initial outlay was some $45,000.00) will become a financial resource to the wife the investment matures at the end of its ten year period. The wife stated that it was her belief that the investment was made in the 2003 or 2004 financial year. I have no expert opinion as to what the value of that investment might be. That being the case I am left with the position that the current value of the asset is nil, and I therefore disregard it for the purposes of a division of property between the parties but bear in mind it might be a financial resource for the wife one day.
In the event the R unit had been added back, the wife concedes that there would still be a debt outstanding in relation to the acquisition of the R unit to the husband’s father of $80,000.00 (on the basis that the original loan was interest free). Given my findings about the R unit, no debt needs to be added back.
At paragraphs 51 to 61 of her affidavit filed 29 October 2007 the wife refers to the husband’s share trading activities and alleges that various things she witnessed over a number of years indicated to her that the husband “was trading recklessly and uncontrollably on the share, futures and options market, having regard to our available funds”. She refers to a conversation she alleges took place between herself and the husband on 12 September 2001, when, in reference to the attacks on the World Trade Centre, the husband said “it will take me years to recover the amount of money I have lost and will continue to lose over this event”. The wife was asked in cross examination whether she attempted to confirm her suspicions regarding the husband’s trading losses, particularly around the date of 12 September 2001, by inspecting a box of trading summaries that had been delivered to the office of her solicitor on 2 August 2007. The wife replied that she attempted to undertake that exercise but she could not understand the documents and could not confirm the position one way or the other. The wife did not assert any amount alleged lost recklessly by the husband be added back to the balance sheet because of waste by the husband.
The husband gave evidence that at the date of separation he had a debt of $33,000.00 on his Westpac mastercard. He said that that debt arose from a credit card that had been issued at the time of the M sports business. The husband said that that card was used for his personal use and the debt generated related to T property and payments in respect of the business.
There was also at the time of separation a debt in the husband’s name to Credit Corp in the sum of $10,000.00. Some of that money was used to pay expenses relating to T property. There were also some personal expenses run up on Credit Corp in excess of $10,000.00 but the husband indicated the $10,000.00 was a fair figure to claim in relation to amounts in respect of which he got no personal benefit.
The husband also owes amounts to N Pty Ltd in the sum of $28,250.00.
Counsel for the wife did not ask the husband any questions in relation to the evidence the husband gave in relation to any of these debts. The husband did not seek to add any of these debts onto the balance sheet.
I do not have sufficient evidence to say that the wife’s credit card debt should be included as a liability on the balance sheet.
In any event, for reasons which will become obvious, I do not need to analyse in any detail whether or not various liabilities of the husband and wife should be counted on the balance sheet.
There was a discussion at the end of the case in relation to the liability the husband might have in terms of capital gains tax in respect of the sale of the M property. The wife had filed a 2007 tax return and had paid $52,000.00 in respect of tax for her half share of the capital gain that had been achieved from the sale.
The husband has a tax debt of the husband relates to the 2007 financial year. He accepted that his income during that year was approximately $40,000.00. The sale of the M premises realised a capital gain in respect of which the wife paid approximately $110,000.00. On that basis, assuming that the husband’s income for the 2007 financial year was $150,000.00, his tax debt would be approximately $50,000.00.
There are no monies left in the U Superannuation Fund. A final return has been lodged in respect of that fund.
As a consequence of the discussion above, the balance sheet is as follows:

Ownership

Description

Value

1.

Joint

Monies in controlled monies account with Newnhams as at 12.11.2008 (Exhibit G)

$424,165.00

2.

Wife

Savings

$3,595.00

3.

Wife

Household contents

$3,000.00

4.

Husband

Household contents

$3,000.00

5.

Wife

Paid legal costs

$63,027.00

6.

Husband

Tax debt

($50,000.00)

Total net assets

$446,787.00

CONTRIBUTIONS

The wife conceded that a 50-50 division of property would be appropriate based on contributions during the marriage, however submitted that I should amend that figure to 60 per cent in favour of the wife based on contributions following separation, specifically her care of the three children.
The chronology set out above indicates that whilst there might be different emphasis in the evidence of the parties to the respective contributions they have both made, the fact was that over a long marriage, up to the date of separation, they both made significant contributions to the development of assets.
Matters which might be highlighted from that chronology are the fact that the husband inherited the R unit which was transferred to his father in 1996 for $150,000.00 and that that $150,000.00 was used by the parties to acquire the W Street property (representing one third of the value of W Street at the time it was purchased).
At paragraph 9 of her affidavit filed 29 October 2007 the wife says that she fully supported the husband financially when he went back to university to complete his Bachelor degree full-time during 1992 and part of 1993. The husband asked the wife in cross examination how she could maintain that position, given that the husband was employed on a full-time during that period. The wife replied that she supported the husband because she was earning a lot more than him at that time and he was living beyond his means. The wife agreed that prior to returning to university full time the husband received a payment of $15,000.00 to $20,000.00 following his retrenchment from his employer, but denied having a conversation with the husband at that time to the effect that those funds would allow him to complete one year of full time study.
The wife states that as at the date of the parties’ marriage she had savings of approximately $50,000.00. Annexure A to the husband’s affidavit filed 20 December 2007 shows a balance of $7,213.00 in the wife’s NAB account as at 23 January 1992, however the wife asserted in cross examination that she had another NAB account into which her salary was paid by her employer. I accept the wife’s evidence about her initial cash savings.
The wife paid for a 12 week overseas holiday for herself and the husband in May 1994, which cost approximately $30,000.00 to $35,000.00.
The wife states that as at 1996 her savings amounted to approximately $100,000.00. The husband questioned her about this figure in cross examination, asking whether she in fact had a tax debt of $30,000.00 with the ATO for the 1996 financial year, in respect of which she signed a payment agreement in July 1997. The wife stated that she was unaware of such a debt. She stated that she was not a PAYG tax earner and that when her salary was paid into her account, she knew that tax had to be paid in respect of it. She thought that the husband was taking care of that for her. The wife stated that the $100,000.00 she had in savings as at 1996 represented the figure before the tax debt to the ATO was paid on her behalf. I accept the husband’s version. It is however uncontested that the parties had $100,000.00 between them at the date of the acquisition of W Street.

The wife states that she received an ex gratia payment of $25,000.00 from her former employer in May 1996 upon her employment being terminated, and an additional amount in January 1998 of $65,000.00 following unfair dismissal proceedings. Therefore, although she was not in paid employment during that period, she received a total of $90,000.00. During cross examination the wife stated that the husband earned a salary of $70,000.00 - $80,000.00 during that same period. She acknowledged that she would not have earned more than the husband during that period. I note the wife’s statement at paragraph 19 (and again at paragraph 145) of her affidavit filed 29 October 2007 that approximately $75,000.00 of that $90,000.00 was placed by her into a term deposit with NAB. The bulk of the money was therefore not used for household expenses and it seems the parties relied upon the husband’s income at this time.
The wife states that during the first two years when she was operating her own professional practice, she was self-sufficient financially and received no financial support from the husband. She stated that her income during this period was derived from consultancy work. She maintained that her income during this period was higher than that of her husband, although she stated that she did not have access to the husband’s accounts at that time, so I am unclear as to the actual basis for that statement. The wife acknowledged that she received assistance from the husband in respect of the accounting side of running her practice. The wife says that she paid all the bills and she does not remember the husband ever contributing. She states that his salary went into his share trading account. The purchase of her new office at P was funded entirely by borrowings from the NAB. The wife retained and used the monies received by way of capital gain from the P property after the separation as discussed elsewhere. The wife stated that during her first year as a sole practitioner, she earned between $15,000.00 and $20,000.00. The wife was asked during cross examination how she can assert that she received no financial assistance from the husband in her first two years of sole practice, in circumstances where she had to service a loan to the NAB while supporting three young children. She replied that it was not in her knowledge whether the husband assisted or not, because she did not have access to the husband’s accounts into which the monies went. I find the husband did provide assistance.
The husband obtained a concession from the wife during cross examination that he cared for O one day a week while the wife was working at F Business. The wife was prepared to acknowledge that the husband assisted with parenting, but maintained her position that she performed the primary care giving role for the children during the relationship. I find the wife was the major carer of the children in the relationship.
The husband sought to suggest in cross examining the wife that Ms K, when she moved into the R unit, paid rent to the husband’s sister, who then transferred the money to Mr Kendall Snr. The wife stated that if that happened, she was unaware of it. I accept the wife did not know what was happening with the rental monies at that time.
The wife stated that she was unaware that the debt to the NAB had reached the level that it had when the W Street property was sold in May 2001. However, the wife had ceased to work at her former employer’s firm at the time the S Street property was purchased, and apart from a brief period of employment with F Business and some consultancy work, did not work again until starting her own practice in May 1999, which did not initially generate much in the way of income. The wife acknowledged that the parties did some work on the W Street property, specifically installing a new kitchen, bathroom and deck. Therefore the debt to NAB increased at a time when the wife was not earning much in the way of income. I draw no adverse inference against the husband arising out of the increase in the NAB debt.
The wife had a superior income during the marriage and was the person primarily responsible for looking after the children. She received payouts from her employer, including a payout in respect of the unfair dismissal claim.
The wife contended that there should be a 50-50 division of property based on contributions made during the marriage up to the date of separation. That submission of course was made in the context of the R unit being part of the pool of assets that were being divided.
I however find that even with the R unit out, that is an appropriate assessment to make.
In relation to post separation contributions, the wife undoubtedly made a greater contribution to the care of the three children. The husband submitted that he should not be penalised for failing to be an adequate provider for the children following separation due to the difficult circumstances that existed between he and his wife after separation. Nonetheless however, the wife bore the major burden of looking after the children after separation.
Balanced against that is the fact that the wife received, after separation, the whole of the proceeds of the sale of the P property. Exhibit N sets out a summary of how those monies were expended. That summary includes $63,000.00 in respect of the payment of her own legal fees (which I have added to the balance sheet) together with amounts totalling about $111,000.00 on rent, school fees and expenses relating to the children.
The husband guaranteed an overdraft facility of $50,000.00 following separation, which the wife has used for living expenses. The overdraft was guaranteed against the business premises.
The wife states that after separation, in 2006, she received professional fees in a matter that she had been working on, which amounted to approximately $122,000.00 after payment of tax and GST. The wife used those funds on living expenses and bills. Although the wife sought to maintain that the bulk of those funds were generated by work done after separation, the fact remains that she was able to obtain and complete that work as a result of the professional practice that had been built up during the relationship.
The wife also states that no payments were made on the mortgage on the T property for over 16 months despite the fact that the husband resided there during that time, which led to Westpac subsequently foreclosing and selling the property in January 2007.
The husband states that after the mortgage on the P property was paid out following the sale of the W Street property, the U Superannuation Fund purchased a 10 per cent interest in the P property for the sum of $20,000.00. The husband stated that the wife knew about and consented to this transaction. He stated that there was no documentation evidencing the fact that the U Superannuation Fund had a 10 per cent interest in the P property apart from tax returns for 2003 and 2004 and some entries for interest and whatever transactions had occurred in the bank account. The husband stated that the U Superannuation Fund received rent by virtue of its interest in the property, which was reflected in the tax return. According to the husband, the transaction was a mechanism to release some cash for the use of the parties and I accept that was so.
At paragraph 197 of her affidavit the wife states that she was unaware of the purchase by the U Superannuation Fund of a 10 per cent interest in the P property and that might also have been so.
Had I had to make a more finely calculated decision on a mathematical basis, then I would have approached the issue of contributions on the basis that they were equal. For reasons set out below, I do not have to make any final conclusions in that regard.

SECTION 75(2) CONSIDERATIONS

The wife has had and will continue to have the full time care of the three children of the marriage.
The wife also submits that she will not be able to look to the husband for much financial support for the children given the way he has managed his financial affairs in the past, and the father’s income earning capacity will be greater than her own. On that basis the wife submits that she should receive an adjustment of 20 per cent in her favour under s 75(2).
Annexure D to the wife’s affidavit filed 29 October 2007 is a finance application to Westpac in relation to the purchase of the M premises in 2003. On page five of the application the husband specified under the heading “monthly income” that the wife was earning $10,000.00 net and he was earning $4,000.00 net. In cross examination the husband stated that he was earning that amount for a period of approximately a year.
According to his financial statement the husband’s current average weekly income is $1,500.00. He pays $170.00 per week in respect of a hire purchase agreement for a Volkswagon Golf motor vehicle. He confirmed in cross examination that he was not currently paying any of his other creditors.
During her oral evidence the wife was taken to paragraph 13 of her financial statement sworn 19 November 2008, at which she states that she receives nil weekly maintenance/child support. It was put to her by the husband that in fact she has received $23,659.06 since 7 May 2008. The wife disagreed with that proposition. When asked how much she says she has received since that date, the wife said approximately $14,000.00 to $15,000.00. The wife conceded that when she wrote “nil”, that had been incorrect, although she later asserted that she was not currently receiving any child support from the husband. The wife seems to make a distinction between receipt of a regular weekly payment and the irregular payment of arrears by the husband.
The husband confirmed in cross examination that as at 7 May 2008 he was indebted $21,240.11 in child support. He asserted that he made a payment of $5,190.07 to the Child Support Agency on 22 November 2008 from his CA Business account via BPay. The husband asserted that because of his debts that he was left with at the date of separation and his attempts to service some of them, he had not been a good provider of child support to the mother after separation.
Both parties maintain a future earning capacity.
The wife operates her own professional practice. As mentioned above, it was not assigned any particular value. It was evident that the wife’s practice was once more viable than it currently was at the time of hearing due to changes in legislation in the area of the wife’s expertise. The wife however is a competent and intelligent woman and I am confident that she will redevelop her professional earning capacity significantly.
The husband too has marketable skills and is currently continuing to be employed in the area that he traditionally worked.
It is clear that the wife’s parents have made a commitment to the education of the children of the marriage at relatively expensive private schools.
Had I been required to make some adjustment under s 75(2) FLA, I would have given the wife a 5 percent adjustment on the basis of the continuing responsibility that she has for the children and my apprehension that the road ahead in relation to receiving child support for the husband may not be a totally smooth one.

JUST AND EQUITABLE

The wife wants an overall 80/20 division of the assets with the R unit included in the pool of assets.
It follows from the above discussion, that had I made a final determination as to what was just and equitable between the parties without the concession the husband has made in the orders he has sought, I would have divided the net assets 55/45 percent in the wife’s favour.

CONCLUSION

I understand the husband’s motivation in seeking orders that are less than he otherwise might have achieved in circumstances where the R unit will be secured for his father.
Given the concessions the husband has made in this case about what should happen if the R unit is not included in the asset pool, I determine that it is just and equitable that the orders the husband seeks should be made. He should have an amount of $50,000.00, towards satisfying the Australian Tax Office in relation to tax outstanding as a result of the sale of the M property and the husband will be paid an amount out of the controlled monies account for that purpose.
It is just and equitable for the wife to receive the balance of the fund.
Otherwise, each party should keep the assets and be responsible for the liabilities that they currently have.
In particular, the husband should indemnify the wife in relation to any future claim made against her by the husband’s father. The application by the husband’s father for a declaration of debt against the wife will be dismissed. There would of course be a strong argument that my dismissal of the husband’s father’s application for declaration against the wife creates an estoppel against any further claim by the husband’s father against the wife. In order to avoid any further argument, it is my intention to finalise the position between the wife and the husband’s father by making a declaration that the husband’s father does not have a claim against the wife in relation to any further outstanding monies.

I certify that the preceding two hundred and thirty-five (235) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts.

Associate:

Date: 21 December 2009

[2009] FamCA 1254

21 December 2009

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Jurisdiction

Injunction

Fiduciary Duty

Costs

Advance of Funds
Advanced by	-	[Mr Kendall Snr]
Purpose	-	Partial funding of purchase of [W Street property]
To	-	[The husband]
Amount	-	$200,000
Commencement date	-	17 May 1996
Term	-	At Call
Interest	-	At a percentage to be mutually agreed upon but not exceeding Cash Management Rate.
Insurance	-	[Husband] to take out term-life policy sum Insured $200,000

1988	The husband’s mother died.
1989	Husband moves into the R unit
1992	The parties married and the wife moves into the R unit with the husband and improvements are carried out.
6 September1994	The husband and his father say that the husband’s father deposited $25,000.00 into the parties’ account.
Mid 1995	The husband and wife moved to rental premises in inner Sydney and thereafter the R unit is occupied sequentially by Ms K, Mr B and Mr Y.
May 1996	The husband’s father provides $329,000.00 to the parties to assist the husband and wife purchase W Street and the husband and his father allege that the agreements which are Exhibit S and Exhibit T are signed by both of them.
May 2001	W Street is sold by the husband and wife. An amount of $149,000.00 is paid back to the husband’s father. Both the husband and wife agree that the husband informed the wife at that time that the debt to the husband’s father had been repaid.
10 June 2003	The respondents assert that the husband’s father provided the sum of $200,000.00 to the husband to assist him to purchase a sports business. There is no doubt the $200,000.00 was paid by the father and there is a cheque stub to that effect. Counsel for the wife conceded that the cheque had been cashed.
8 July 2003	The husband deposited $50,000.00 into his father’s account.
September 2005	The husband’s father helps pay stamp duty on T property in the sum of $20,247.00.
September 2005	The parties separate.
4 November 2005	The wife deposited $10,000.00 into the husband’s father’s account.
August 2006	The wife lodges a caveat on R property.
14 August 2006	A retrospective valuation is prepared by Quaid Partners.
30 August 2006	Transfers in relation to the R unit are stamped.
9 November 2006	Transfers in relation to the R property are registered.
20 April 2007	The husband’s father commenced a statement of claim in the District Court against his son claiming an outstanding amount of principle of $160,242.00 together with interest of $54,142.00. The husband’s father obtained judgment against the husband.
9 May 2007	The husband’s father issues a writ for an amount of $217,374.00 in the District Court against the husband and the amount remains outstanding.

Ownership	Description	Value
1.	Joint	Monies in controlled monies account with Newnhams as at 12.11.2008 (Exhibit G)	$424,165.00
2.	Wife	Savings	$3,595.00
3.	Wife	Household contents	$3,000.00
4.	Husband	Household contents	$3,000.00
5.	Wife	Paid legal costs	$63,027.00
6.	Husband	Tax debt	($50,000.00)
Total net assets			$446,787.00